Understanding the county payments issue

There's been plenty of news lately about the "county payments" issue - and how, apparently, a Bush administration decision is going to decimate funding for a bunch of county governments in Oregon.

OK, so what is this issue - and how did this happen?

In an Oregonian op-ed, Edwin Battistella explains it succinctly:

How we got here is a long story. More than half of Oregon is federal land. In the 1860s, the government granted about 4 million acres of Western Oregon forestland to what soon became the Oregon & California Rail Road Co. to promote construction of a rail line from Portland to California. The company managed the land so corruptly that President Theodore Roosevelt intervened, and much of the land was eventually returned to public ownership. The result was that taxable property at the county level was cut nearly in half.

Part of a century-old deal was that logging revenue from this land would be shared by the federal government with local counties. For almost 90 years, timber revenue far outpaced local property taxes in much of rural Oregon. But in the 1990s, timber revenue declined by about 70 percent, and today property taxes are the main source of local revenue. Until this year, however, a remnant of the timber payments continued as safety-net funding for counties under the Secure Rural Schools and Community Self-Determination Act.

This act was passed at a time when the federal budget had projected surpluses. Now Congress has chosen not to reauthorize it. Of course, it's not just one county in Oregon that will be affected. Altogether, 700 counties in 39 states are facing crises because of the act's demise. But Oregon will be the hardest hit: Last year Oregon counties received more than $149 million; California was second with about $66 million.

How bad is it?

In Jackson County, they're planning on shutting down - entirely - the 15-branch county library system on April 7. The rest of Edwin's op-ed is about that issue. Read it here.

Discuss.

  • JesseO (unverified)
    (Show?)

    In my county, we'll see a $23 million budget gap; only $8 million of that supported libraries, so there will be other casualties as well, including public safety... Perhaps there will be a resolution, since at just $40 per capita, libraries are a bargain. But with the failure of a local tax levy in the last election, immediate options are limited.

    So to make itself whole, Jackson County needs to pass a property tax levy of $120 a person, or $300 a house? In Multnomah County we passed levies like that in the past few years to pay for our schools.

    This seems like an overhyped problem by people who've been living off federal subsidies and aren't willing to pony up. Yes, the federal land impacts the property tax base. But we've given a subsidy and chance to adjust.

  • brett (unverified)
    (Show?)

    Does anyone know how per capita property taxes in the most affected counties, like Jackson, compare to those in other Oregon counties? If they are lower, then I guess that would be considered living off a subsidy.

    Do voters in those counties tend to support tax limitation measures? If so, it will be interesting to see how they feel about property taxes if they lose the timber payments.

    I'd sure hate for them to close their libraries and lose other essential services. Somehow the antitax crusaders manage to forget what those taxes pay for -- then blame the government when roads crumble, school class sizes soar, libraries close, crime rises, etc.

  • Leo3 (unverified)
    (Show?)

    This is a great opportunity for the state to come together and help heal the rural vs urban divide. The state will have to step up and offer assistance where the feds, under the leadership of Sen G. Smith, has failed. While this really sucks, we should use it at an opportunity.

  • Former Salem Staffer (unverified)
    (Show?)

    Some quick facts and figures here: Josephine County's tax rate is 58 cents per $1000 of assessed property value. Curry County is at 59 cents. The state median is $2.50, and the highest is Sherman County, I believe, at over $8. But there's a lot more to be considered. For Curry County to maintain its current level of service would require a tax rate of over $15. This is mostly because there isn't much of a tax base out there. Josephine County is proposing a levy this May that would put its level at the state median. But it would still need over 50 percent voter turnout to pass, which is easier said than done.....

  • (Show?)

    Perhaps the state legislature should do what Congress does. Offer assistance to the counties that also raise their own taxes up to at least the state average on some matching funds level.

    Eventually, however, the whole concept of timber subsidies needs to be eliminated. I am sure that there are poor rural counties that have little timber and are not eligible for these subsidies. Excepting transitional payments, they should be treated the same as counties with timber.

  • Chuck Butcher (unverified)
    (Show?)

    Maybe property taxes on that land are the way to go. Or, failing that closing off all county provided access and sevices. Since the Fed wants to abrogate reponsibility for that dirt being where it is, it should get the service it pays for.

  • (Show?)

    Former Salem staffer, it might be helpful to publish every counties property tax rate. Hope you can help us out.

    The question asked by brett is the right question to ask. While many of our heavily forested counties are receiving O&C funds, aproximately half of their land is owned by the Federal government. Some counties used a percentage of O&C funds to take care of their responsibilites, some used nearly all, (Josephine County with .58 cents per thousand on property taxes outside the city limits of Grants Pass) and are facing massive issues from lack of fire protection, closed fire tanker bases, slashed sheriff patrols, deep cuts in road maintenence and the closure of public libraries.

    The futher west in the US, the more land is owned by the Feds, Idaho, Montana, Washington State, CA, and our beautiful Oregon are prime examples.

    Many will diagree, but I think county residents in O&C counties need a little education about what share they pay in property taxes compared to other counties.

    The buzz down here in Jackson county is one more year of O&C funds at a very reduced rate.

    The federal government is breaking a promise that it made 80 years ago in exchange for timber payments we lost. Federal offsets are happening in many states slashing federal funding because the funds that used to support those programs have been drained off by the Afghan and Iraq war.

    Cost of the war in Iraq

    8.4 Billion a month $2 Billion per week $279 million per day $11.6 million per hour $ 3.8 million per 20 minutes

    Jackson County Budget shortfall is $3.2 million due to loss of O & C funding

    Paulie

  • (Show?)

    Unfortuntely, I see another cloud descending down on hard-hit rural counties, and the timber tax relief may be the lynch pin that forces these rural counties to dump their land-use planning and allow large subdivisions and destination resorts to in order to bring much-needed revenue into county coffers.

    I hope I'm wrong, but this just seems to fit in with the "sell off the forests" crowd that is positively salivating about developing as much of the west as they can. I suspect the move to eliminate the timber tax receipts law was a calculated move in that direction.

  • JonBoy (unverified)
    (Show?)

    If the federal government exercises its right to claim direct ownership and oversight of land within a state, then the federal government should be expected to pay when the expected perpetual revenues from those lands dry up, whether the reason behind the cessation of income is noble, base, morally neutral, or disputable.

    The federal government is holding properties that would otherwise belong to the county, municipalities, businesses or individual private owners. Therefore the federal government is imposing upon the local governments to bear the burden of their presence without being beholden to the local government for financial assistance to replace the permanent loss of revenue from normal use of the land that counties in the west side blue zone enjoy.

    It is understandable that many people in the NW people-maze, with wall-to-wall dwellings and businesses, who absorb 70& of all property tax revenue collected in the entire state, cannot be expected to understand the situation from the viewpoint of the rural counties.

    Many of those who are chorusing the "suck it up, raise your taxes and get used to it" song are likely the ones who would never allow the cougars and wolves to roam their own precious parks and waysides, but will fight tooth and nail to make sure that they are re-introduced into the back yards of the citizens on the east side. In my humble opinion, I perceive a lack of understanding toward most any issue that is mostly rural. Saying, "Hey, we do this here in the big city, just learn to make it work for you, buddy," is a shallow view that I would like to say, "won't fly," but considering that most of the representation in government is from the populous side, it probably will.

    The other fair alternative would be to have the federal government pay county property taxes on its holdings.

  • VR (unverified)
    (Show?)

    "It is understandable that many people in the NW people-maze, with wall-to-wall dwellings and businesses, who absorb 70& of all property tax revenue collected in the entire state, cannot be expected to understand the situation from the viewpoint of the rural counties."

    Those same people in those "people mazes" make up about 70% of the region's population.

    "Many of those who are chorusing the "suck it up, raise your taxes and get used to it" song are likely the ones who would never allow the cougars and wolves to roam their own precious parks and waysides, but will fight tooth and nail to make sure that they are re-introduced into the back yards of the citizens on the east side"

    What does that have to do with tax base?

    So you chose to live in a place that had an economy based on Timber, and now there is not as much Timber economy. Is that everyone's fault?

    Hey - I own property in an area that used to be mined for gold - but is not anymore. Where is my subsidy check?

    "Saying, "Hey, we do this here in the big city, just learn to make it work for you, buddy," is a shallow view that I would like to say, "won't fly," but considering that most of the representation in government is from the populous side, it probably will."

    That is because "representation" is for PEOPLE - not acres.

    But if you want services you need to pay for them. That is a simple fact.

    You cannot be anti-tax and pro-services. They are mutually exclusive.

    The rural people were just lucky that they could suck off the federal teat for so long. The internet is bringing visibility to things that used to go unnoticed.

    You think all the taxpayers in Manhattan or Boston or Houston or Los Angeles or Chicago or Philidelphia or Miami or Minnneapolis want their tax dollars going to pay for a Library in rural Oregon?

    Since there are fewer people in rural areas the cost has to be higher per person for the same sevice. Some things just don't scale down that well.

    When I was growing up we had to pay $100,000 to get electricity to our property because there was ONLY US for miles, and no one to share the cost of all the poles and wire and labor. So we waited until we could get more people together on some neighboring ranches and share the cost. By getting a few more ranches in on it we were able to lower the cost to below 50k each. But still FAR FAR more than it would have cost to run power to a new home in the city.

    The same concept holds true for a Library or a School. Fewer people paying into the pot either means fewer services or more cost for those services.

    Oregon had been lucky for a long time.

  • jim karlock (unverified)
    (Show?)

    How did the timber revenue happen to decline?

    Thanks JK

  • Ross Williams (unverified)
    (Show?)

    I think the inevitable is happening. Rural areas have always relied heavily on subsidies for infrastructure from railroads, to roads to rural electrification to schools to libraries. As the commitment to government services has declined so has the commitment to making those services universal. And as money gets tight, its unrealistic to expect people in urban areas to continue to pay to maintain services in rural areas while seeing their own services decline.

    As I recall the counties did own the most of the land in the Tillamook State Forest. But they couldn't afford the cost of fire suppression and reforestation. Especially after the huge burns in the middle of the last century. And they got a lot more land from tax foreclosure after timber had been cleared off it.

    Its not surprising that urban folks are the scapegoats for rural residents problems. But it doesn't make it true.

  • JonBoy (unverified)
    (Show?)

    "It is understandable that many people in the NW people-maze, with wall-to-wall dwellings and businesses, who absorb 70& of all property tax revenue collected in the entire state, cannot be expected to understand the situation from the viewpoint of the rural counties."

    Those same people in those "people mazes" make up about 70% of the region's population.

    "Many of those who are chorusing the "suck it up, raise your taxes and get used to it" song are likely the ones who would never allow the cougars and wolves to roam their own precious parks and waysides, but will fight tooth and nail to make sure that they are re-introduced into the back yards of the citizens on the east side"

    What does that have to do with tax base?

    East-siders would see the connection here. It has to do with an age-old concept called "tyranny of the majority." To be fair, the majority doesn't always rule. Different segments of society have different needs. If the majority has a common need, they should, in all fairness, not tread on the minority and their needs in order to fulfill their own at the detriment of the others.

    So you chose to live in a place that had an economy based on Timber, and now there is not as much Timber economy. Is that everyone's fault?

    If the west side becomes so crowded it needs light rail, is it my fault? I'm helping pay for it. If I chose to live here...? Hmmm...I was raised here, as were most of the rest of us. So, then, the solution is for all of us to move to Portland? Never thought of that.

    Hey - I own property in an area that used to be mined for gold - but is not anymore. Where is my subsidy check?

    We didn't run out of timber. Zealots, largely from the populous areas, including from others states, took the timber harvest on federal land away. Started out wanting "sustainable yield" then added "species protection" and "habitat" including including animals, such as the Canadian lynx, that have never been here in any signicant numbers. The principle: if you're going to take something away that hurts the people, then perhaps there is an obligation to ameliorate the damage.

    "Saying, "Hey, we do this here in the big city, just learn to make it work for you, buddy," is a shallow view that I would like to say, "won't fly," but considering that most of the representation in government is from the populous side, it probably will."

    That is because "representation" is for PEOPLE - not acres.

    Wrong again. That's why we grew up saying "...and to the Republic, for which it stands...." The last I checked, there are senators on both the state and national level. They represent "acres," in a manner of speaking. In fact, an individual senator has more clout than an individual representative, who represents only people.

    But if you want services you need to pay for them. That is a simple fact.

    "We" will pay for services no matter what. The issue is whether the burden for every service falls on the user only. It doesn't work that way in Portland, and it doesn't work that way anywhere else. Except for direct fee-based services, the only question is whether a small local group, a larger regional group, a statewide group, or all of us together are going to chip in a little bit and pay. Nobody is getting anything for nothing, in any case. This issue involves federal land being held for the good of the whole citizenry of the United States. It is not unreasonable to ask the whole citizenry to help fund the services that depended on that federal land for subsidies. Many would say that the timber subsidies were all part of the "fair deal" that helped whole idea of National Forests take hold and succeed.

    You cannot be anti-tax and pro-services. They are mutually exclusive.

    I am not anti-tax. That is an assumption. Who to tax, how much, and for what, is always a legitimate subject for discussion and arbitration.

    The rural people were just lucky that they could suck off the federal teat for so long. The internet is bringing visibility to things that used to go unnoticed.

    I must be missing something here. I always thought that the urban folks did their own fair share of sucking. I guess I missed the news where they had stop applying for federal money and help. Or, could it be that we are all U.S. citizens, and we all provide the milk for the federal teat? Who gets it and for what is the question.

    You think all the taxpayers in Manhattan or Boston or Houston or Los Angeles or Chicago or Philidelphia or Miami or Minnneapolis want their tax dollars going to pay for a Library in rural Oregon?

    They own the land in my county, along with me and many others. Why not? I have paid all my life for grants and subsidies that are spent outside my town, my county, and my state.

    Since there are fewer people in rural areas the cost has to be higher per person for the same sevice. Some things just don't scale down that well.

    When I was growing up we had to pay $100,000 to get electricity to our property because there was ONLY US for miles, and no one to share the cost of all the poles and wire and labor. So we waited until we could get more people together on some neighboring ranches and share the cost. By getting a few more ranches in on it we were able to lower the cost to below 50k each. But still FAR FAR more than it would have cost to run power to a new home in the city.

    The same concept holds true for a Library or a School. Fewer people paying into the pot either means fewer services or more cost for those services.

    The point is, the federal government holds great blocks of land in rural counties. Because of this, the land cannot be used as a tax base. The federal government holds this land on behalf of everyone in the U.S. The federal government used to acknowledge this principle, back in the days when "school sections" were established. As the original article explained, the timber subsidy was part of the original deal. It expired. The reasons for the original deal still exist, so it should be re-instated. I suspect that it had an expiration date so that all the exigencies that might arise over the period of nearly a century could be examined, and the decision made as to whether to continue the subsidy. The subsidy is just and fair, and should be considered today as a fair trade-off to relieve the burden put on "National Forest Counties" that have substantial portions of the county under federal control and off the tax roles.

    Oregon had been lucky for a long time.

    It wasn't luck that established the timber subsidy, it was a sense of fair play and a wise and just thing to do. It is a loss of that sense, and perhaps an erosion of the collective wisdom, that wants to take without giving anything in return.

  • brett (unverified)
    (Show?)

    I'm not saying the feds don't owe Oregon (and any other state with federally owned land) some compensation for the land they own that we could otherwise tax. I'm just sayin' that it's gonna be hard to get much sympathy and support for such payments until the affected counties are taxing themselves at at least the average tax rate of other Oregon counties, and then we see what needs are left. That would put the rural counties in the persuasive position of saying: 'Look, we're doing everything we can and everything the rest of the state's doing, and, through no fault of our own, we can't make ends meet.' But of course I'm from the big city so am not allowed to have an opinion about the rest of my state. I do like the idea of the feds paying the equivalent of a county tax (a "real" tax wouldn't be constitutional, I imagine) on their holdings equal to the opportunity cost of what the counties could have collected off private owners.

  • Calvin Hunter (unverified)
    (Show?)

    Josephine County will survive without a tax levy. The government is using scare tactics once again to shape public opinion. Government mismanagement, waste, fraud, abuse, and neglect has led us into our current financial situation. Be brave and vote "No" on any proposed property tax increases in Josephine County. There are plenty of alternative ways to fund necessary services. It just takes time and planning to work out some equitable solutions. Lets start by making the county commissioners' positions voluntary. Next we should demand that elected officials stop campaining and go to work.

in the news 2007

connect with blueoregon